Fight for control of Federal City in Algiers could hurt its chances to land business

It's on the short list for a proposed Marine Corps information technology center with 900 high-paying jobs

With the Marine Corps on the verge of deciding whether to create an information technology center with 900 high-paying jobs, officials involved with the Federal City project in Algiers have called for a resolution to their long-simmering dispute over who will control the redevelopment of the former Navy base.

View full sizeDavid Grunfeld, Times-Picayune archiveIf the Marine Corps decides to put its IT center at Federal City, it would be a feather in the cap for one of the stateâs largest economic development projects.

The Marine Corps Support Facility New Orleans is on the short list of sites the Marine Corps is considering for the proposed center, which would be a feather in the cap for one of the state’s largest economic development projects.

But officials worry that the disagreement between the Algiers Development District board and the nonprofit New Orleans Federal Alliance over control of Federal City could harm the state’s chances of landing the IT center. The tinderbox was evident during a standing room-only Algiers district board meeting last week, when businessman Glenn Orgeron spoke out in frustration over the lack of consensus.

“From a public standpoint, all we see is a stalemate,” Orgeron told members of both boards. “Everybody needs to come together ... There are too many opportunities there.”

Federal City is one of four sites “being evaluated as a potential long-term solution for hosting the IT Center,” which is in Missouri, according to Capt. Kendra Motz, a Marine Corps Headquarters spokeswoman. The Marines expect to remain in Kansas City until at least 2017, when their lease expires. A cost/benefits study is underway on the proposal, she said last week.

“We anticipate completing the business case analysis by fall of 2012,” Motz said.

Louisiana Economic Development is courting the center and recently visited Marine Corps Headquarters in Arlington, Va., local officials said.

“Several of the national military installations in Louisiana, such as Barksdale Air Force Base, Fort Polk or the Navy base at Belle Chasse, are among the largest employers in our state, so we regularly meet in Louisiana and at the Pentagon with our military partners to discuss mission sustainment and mutual support, as well as potential growth opportunities,” Economic Development Secretary Stephen Moret said. “For competitive reasons, we don’t comment on current or potential prospects.”

The state already has provided $150 million to Federal City. About $110 million was used to build the Marine Corps Support Facility in order to keep Marine Forces Reserve and Marine Forces North, along with 1,300 jobs, in New Orleans.

For the IT center, the state has offered to subsidize a portion of the cost for a new building inside the secured Marine compound, retired Marine Corps Maj. Gen. David Mize, who is spearheading Federal City for the alliance, has said.

Alliance chairman Bill Ryan has called on both sides to “defuse the tension.” At stake are 800 to 900 jobs. “We’re in this together to make this the best we can for Federal City,” Ryan told the board.

“Rumor” of the disagreement “is not going to help our chances,” New Orleans City Council President Jackie Clarkson, another alliance member, told the Algiers board.

“The spotlight is on us, and it is time for us to make a move,” she said.

Last year, the alliance sued master development team HRI/ECC, alleging a breach of contract over nonpayment of an Entergy bill and utility deposit. That lawsuit has widened in scope, as HRI countersued the alliance for nonpayment of fees and recently named the Algiers board as a defendant. HRI alleges the Algiers board wants to remove it as Federal City’s developer.

The board and alliance have discussed an agreement in which they would jointly oversee the project. But Algiers board members said the lawsuit has muzzled those discussions. “The lawsuit is what stopped our negotiations,” said state Sen. J.P. Morrell, D-New Orleans and a member of the Algiers board.

New Orleans Civil District Court Judge Robin Giarusso will meet with the parties and their attorneys Monday. Alliance lawyers at the Algiers board meeting said Giarusso has made it clear that the board and alliance could negotiate an agreement without affecting the lawsuit.

Federal City also will be the subject of a town hall meeting, hosted by Clarkson and City Councilwoman Kristin Gisleson Palmer, also a member of the Algiers board, on Tuesday. The meeting is 5:30 to 7 p.m. at the Algiers Regional Library.